Produced in partnership with James Ufland of Slaughter and May and Chris McGaffin of Slaughter and May

The following Corporate practice note produced in partnership with James Ufland of Slaughter and May and Chris McGaffin of Slaughter and May provides comprehensive and up to date legal information covering:

  • Underwriting
  • Documenting the underwriting
  • Underwriting agreement
  • Sub-underwriting letter
  • Agreement between underwriters
  • Sub-underwriting
  • A company's power to pay underwriter's commission
  • Standby underwriting


This Practice Note looks at the underwriting of an offer of shares by a public limited company, including how an underwriting is documented, the company's power to pay the underwriter's commission, sub-underwriting and standby underwriting.

Where a public limited company is making an offer of its shares (whether by way of an initial public offer or a secondary offer) (offer) and requires certainty regarding the amount that will be raised it will usually arrange for the offer to be underwritten.

Any selling shareholder involved in the offer will usually make similar arrangements or be included in the arrangements the company makes.

Typically the underwriter or underwriters (where an underwriting syndicate is involved) will undertake to subscribe for all of the company's shares being offered where such shares are not taken up by other investors. It is possible for only some of the offer to be underwritten, eg where a substantial shareholder or a director shareholder has provided an irrevocable commitment to take up their entitlement under a rights issue or an open offer such entitlement will usually be excluded from the underwriting. The underwriter may also seek to sub-underwrite its underwriting obligations to minimise its risk.

Documenting the underwriting

The main documents required will depend on the nature of the underwriting itself, eg whether the underwriter will want to sub-underwrite its obligations or whether the underwriter is

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